Experts Agree: Financial Reform Is Great Success, Total Failure

The Senate just passed the big financial reform bill. President Obama will sign it next week. What does it mean? Nobody can agree. The Wall Street Journal asked a dozen financial big cheeses to grade it; SwissInfo did a similar thing, assessing the bill from an international perspective. What's interesting is that there's very little middle ground: People view the reforms either as a more or less great success, or a more or less total failure. The success camp cites new regulations and regulatory powers that should prevent an exact repeat of the derivatives-fueled 2008 banking collapse. The failure camp cites lack of new rules demanding banking transparency — leaving in place the fundamental conditions that made the 2008 collapse possible. My money (so to speak) is on failure. Banning specific behavior closes specific loopholes. Failing to ban broad threats leaves broad weaknesses. We may never see another mortgage-backed derivatives implosion. But we are sure to see an implosion of another kind, brought on by new, equally obscure investing practices. The banks, clearly, have already found some. Here's a Drudge Report screenshot from this morning that says all you need to know: